The Ethereum ecosystem stands at a crossroads as developers race to solve mounting challenges with its layer-2 scaling strategy. A new approach called “based rollups” might offer the solution the community desperately needs.

The Layer-2 Fragmentation Problem

Ethereum’s embrace of layer-2 networks has successfully reduced fees and improved transaction speeds, but it’s created an increasingly fractured landscape. With over 140 active layer-2 networks now processing more transactions than Ethereum itself, moving assets between these networks has become expensive and cumbersome.

This fragmentation has sparked serious debate within the Ethereum community, with many fearing the blockchain could lose its competitive advantage if these issues aren’t addressed.

The current layer-2 rollups face two major challenges:

• Poor interoperability: Different layer-2 networks struggle to communicate effectively with each other
• Centralized sequencers: Most rollups rely on company-controlled sequencers to order and process transactions

Based Rollups: A Different Approach

Based rollups offer a fundamentally different architecture compared to traditional layer-2 solutions. Instead of handling transaction execution on separate networks, they leverage Ethereum’s own sequencing mechanisms.

The key difference is that based rollups use Ethereum’s built-in validator network for sequencing rather than relying on centralized sequencers operated by private companies. This approach addresses concerns about censorship resistance and single points of failure that plague many existing layer-2 solutions.

Near-Instant Composability

Perhaps the most significant advantage of based rollups is their ability to interact with each other almost instantly. Since they all use Ethereum’s sequencing, transactions between based rollups can occur within the same Ethereum block.

Ben Fisch, the CEO of Espresso Systems, explained the dramatic improvement in cross-chain operations: “You could have, in the span of one Ethereum block, a based rollup withdraw assets, do something in the layer-1, deposit the assets back, do something in the layer-2 and withdraw assets again.”

This seamless interoperability could dramatically improve the user experience across the Ethereum ecosystem.

Technical Challenges Remain

Despite their promise, based rollups face significant technical hurdles before widespread adoption becomes feasible:

1. Proof generation speed: Based rollups need to generate proofs every 12 seconds to match Ethereum’s block time. Current zero-knowledge proofs take minutes, while optimistic proofs can take up to seven days.
2. Layer-1 proposer incentives: Since Ethereum validators would handle transaction sequencing, there are concerns about maximal extractable value (MEV). These validators are economically motivated and might reorder transactions to maximize profits rather than prioritizing the rollup’s needs.

Developers are working on solutions like “based pre-confirmations” that would create economic incentives for proposers to act in the interest of rollups.

Early Days for Based Technology

Currently, only one based rollup, Taiko, is live, though several projects are exploring the technology. According to Fisch, a breakthrough in proof generation speeds could be “imminent.”

However, Fisch cautions that based rollups aren’t a one-size-fits-all solution: “My personal opinion is that based rollups are one part of the solution, they are not the only solution, and not all layer-2s necessarily should or will be based.”

As Ethereum continues to evolve its scaling roadmap, based rollups represent a promising approach to maintaining the network’s competitive edge in the face of growing complexity and fragmentation.

The coming months will reveal whether this technology can deliver on its promise to unite Ethereum’s increasingly diverse ecosystem.